Tricksy Reductions

Food Inflation Kept Hidden in Tinier Bags , reports the New York Times . Because the prices of raw materials are going up, food companies have developed various ways of maintaining their profits by hiding the fact that they’re offering less than they did before.

Ms. Stauber, 33, said she began inspecting her other purchases, aisle by aisle. Many canned vegetables dropped to 13 or 14 ounces from 16; boxes of baby wipes went to 72 from 80; and sugar was stacked in 4-pound, not 5-pound, bags, she said.

Five or so years ago, Ms. Stauber bought 16-ounce cans of corn. Then they were 15.5 ounces, then 14.5 ounces, and the size is still dropping. The first time Ive ever seen an 11-ounce can of corn at the store was about three weeks ago, and I was just floored, she said. Its sneaky, because they figure people wont know.

In every economic downturn in the last few decades, companies have reduced the size of some products, disguising price increases and avoiding comparisons on same-size packages, before and after an increase. Each time, the marketing campaigns are coy; this time, the smaller versions are greener (packages good for the environment) or more portable (little carry bags for the takeout lifestyle) or healthier (fewer calories) . . . .

Consumers are generally more sensitive to changes in prices than to changes in quantity, John T. Gourville, a marketing professor at Harvard Business School, said. And companies try to do it in such a way that you dont notice, maybe keeping the height and width the same, but changing the depth so the silhouette of the package on the shelf looks the same. Or sometimes they add more air to the chips bag or a scoop in the bottom of the peanut butter jar so it looks the same size.

The article goes on to describe other techniques of the same deceptive kind. This is the sort of thing that makes a supporter of the market cringe  or ought to, though I’m afraid it doesn’t always. Of course these companies need to account for the rise in their costs, which means that the consumers will have to pay more for their products. No one expects the shareholders to sacrifice so the rest of us can pay less for our banana nut chocolate chip raisin rum mint swirl ice cream or southwestern jalapeño onion and salsa flavored tortilla chips, or even for our rice or flour or eggs. We have those things because someone has gone to the trouble of procuring them, turning them into a product, and then delivering it to a store where we can buy it, and they ought to be paid for doing so.

But tricking people into thinking they’re getting what they used to get for the old price is just lying. It’s tricksy, as Gollum would put it (and he would know). It may be a technique that passes without comment in many of the business schools and corporate marketing departments in America, but still, they shouldn’t be deceiving people into buying something thinking it’s another thing.

Yes, consumers are responsible for making wise choices and looking at things like the size of the package, though a gentleman would not take advantage of the simple, naive, and trusting. But still, you don’t lie to people just because they’re responsible for catching you when you do. Imagine if one of your children tried something like this, pulling a fast one on a sibling or neighbor in trading Halloween candy, say. No good parent would reward him for his shrewdness in anticipating the ignorance of his victims. You’d correct him, and punish him if necessary, and try to teach him the necessity of transparency and truthfulness, of making fair deals even if that means going out of his way to make sure the other person knows exactly what he’s giving up and what he’s getting, and doing so even when transparency might ruin the deal.

There is no difference here in what we ought to expect of the growing child and what we ought to expect of the grown-up corporation.